Retention Edge E25: Financial Reality Checks for Ecommerce Founders

This week on the Retention Edge podcast, we hosted Abir Syed, co-founder of ecommerce accounting service UpCounting and general ecom finance whiz.

Abir works with dozens of ecommerce brands across the US and Canada, which gives him a rare vantage point. He doesn’t just see one P&L; he sees patterns across the entire market.

The key takeaway from our conversation was this:

It’s a common thing, not just with ecommerce, but business in general.

You might have a great product, you might have the best marketing and killer CX… but if your financials aren’t in order, your business can still fail.

I’d say it’s the most common blind spot for ecom founders - because you’re more likely to start a brand as an ideas/marketing person, rather than a CFO.

That’s why this chat was so valuable. Let’s dive deeper now, with they key takeaways Abir had to share with our audience:

Ecommerce Isn’t Dead. But Easy Growth Is.

Ecommerce today is undeniably harder than it was five or six years ago.

Customer acquisition is more expensive. Attribution is worse. Margins are tighter. The “turn on Meta ads and print money” era is long gone.

But that doesn’t mean ecommerce is broken.

What has changed is that ecommerce has matured. And mature industries reward operators, not just marketers.

The brands still winning are the ones with strong business fundamentals.

• They understand cash flow

• They model scenarios

• They know where profits actually come from

The ones struggling are still hoping the old playbook magically starts working again.

Why So Many Brands Are Less Profitable This Year

Across Abir’s client base, profitability is under pressure, even for brands doing $10M-$20M+ per year.

Two main reasons show up again and again:

1. Higher CAC that brands are reluctant to accept

2. Margin pressure, from tariffs, COGS, and operating costs

A common mistake is that brands keep spending through rising CAC because they don’t want revenue to dip. The result is you’re able to maintain revenue at around the same level, but your profit quietly disappears.

The brands that are crushing it are the ones willing to adjust their strategy, instead of clinging to last year’s assumptions.

Retention Is Still Criminally Underfunded

Most ecommerce brands still operate like this:

~95% of effort on acquisition

~5% on retention

Brands that over-index on acquisition tend to be:

• More volatile month to month

• Harder to forecast

• More fragile when ads underperform

Abir has seen seven-figure-per-month brands collapse entirely when their acquisition engine broke - because there was no repeat purchase engine underneath it.

Retention doesn’t just increase LTV. It stabilizes your entire business.

Retention benchmarks vary by category, but Abir shared a useful rule of thumb:

• 20–40% returning customer revenue → generally healthy for repeat-purchase brands

• Below that → retention opportunity

• Above ~60% → you could be under-investing in acquisition (with some category exceptions)

Keep in mind, the goal isn’t “all retention” or “all acquisition.”

It’s balance. You need a reliable stream of new customers as well as existing customers coming back.

The 3 Most Common Financial Mistakes in Ecom

When brands come to UpCounting, several issues tend to show up more than others:

1. Poor cash flow management

Founders obsess over Shopify revenue and ad spend, but ignore inventory timing and cash gaps.

2. Financial data that’s unusable

Either the books lack detail, or no one looks at them. Especially dangerous for omni-channel brands.

3. No clear KPIs

Many founders don’t know:

• Their break-even ROAS

• What “good” CAC looks like

• How much they should spend on ads, agencies, or headcount

Without that clarity, every problem looks like a marketing problem.

The Hardest Part Isn’t Math, It’s Mindset

The thing is, with most of the brands Abir deals with, the math is usually clear.

This isn’t where the resistance is coming from. Most people can figure that out well enough.

The resistance comes when founders don’t like what the numbers are telling them.

• Rising CAC? Revenue might need to come down.

• Over-optimistic LTV assumptions? They need to be challenged, replaced with more realistic goals.

This is why conservative models, scenario planning, and retention revenue matter: they reduce how much of the business is built on hope.

Abir’s 3 Pieces of Advice for Ecommerce Leaders

If you want to start taking more control over your finances, here are three key pieces of advice:

1. Truly understand your financial model

   Not just revenue, but how CAC, LTV, cash flow, and margins interact.

2. Stop assuming acquisition will get easier

   It probably won’t. Invest in creative, stay close to what’s working now, and adapt faster.

3. Run ecommerce like a real business

   Build processes, delegate, hire intentionally, and think beyond ad accounts - especially at scale.

If you’re feeling pressure right now, this episode is worth a listen.

Not because it promises a silver bullet, but because it helps you see the game more clearly.

You might think you need a better product, better marketing, more ad spend.

But understanding your financials and building a brand with healthy cash flow is a competitive advantage in a market where many brands do not.

Check out the full episode here:

You can get it on Spotify too, if that’s your thing. Wherever you listen, don’t forget to like, rate, review, comment, subscribe. Each interaction helps us bring more experts on to share their wisdom (always free, btw).

If you want to learn more about Abir and what he does, here’s where to get in touch:

• Connect with him on LinkedIn

• Check out his company UpCounting

I’ll be back later in the week with the latest from around the ecom world, plus our regular deep dives into retention and sustainable growth strategies.

Talk soon,

Pietro and The Retention Edge Team

PS: thinking about launching your own app? Go to our website to get a preview of your app for free, or shoot me a DM on LinkedIn to talk about it.